Home-based Businesses

A home-based business will be either, the base for a business e.g. a tradesperson working out of their home base, or the place of business e.g. a hairdresser working mainly at their own home. If you’re thinking of starting a business like this, your first step is to contact the local council planning department to get their guidelines for home-based businesses.

Start with your council website

Council websites often provide a good overview of business activity in their area and support for home-based businesses. This can be helpful to identify your competition and plan how you will market your products or services. Go to Find your Local Council for complete details of all Victorian councils including their websites. See External Links to the right of the screen.

Setting up a business at home

The following step-by-step guide and infomation sheet will help you understand what's involved in setting up a business at home and what permits you'll need to get from your local council.

Step-By-Step: Setting up a Business From Home Complete this guide to get answers to home-base business questions like: How suitable is my home? Do I need a building permit? Can I have employees? What insurance do I need?

	Setting up a home-based business (PDF 134Kb)
	A guide to: businesses which do and do not need a council planning permit; setting up your home workspace; registrations and licences you may need; allowable tax deductions; additional insurances which may apply; and networking you can tap into.

Check with the local council if you need a planning permit

As a general rule, you will not need a council planning permit if:

• the home is your main place of residence
• you employ no more than one person who does not live there
• the total floor area used in the business is not more than 50 square metres, or one third of the total floor area of the home
• the business does not use more electricity, gas or water than normal domestic usage, and does not decrease the attractiveness or value of the neighbourhood
• nothing is offered for sale, except goods made or repaired on the site
• no goods are displayed so that they are visible from outside the site

As well as planning permits, also ask your council about:

• zoning, overlays and any other local planning guidelines
• other permits, registrations or licences which may be needed
• restrictions on vehicles to be used for business purposes
• local laws affecting small businesses e.g. putting up a permanent sign

Insuring a home-based business

A common misunderstanding among home-based businesses is, because they’re operating from home, they are adequately covered by a domestic Home and Contents insurance policy. In most cases this is a mistake because the public liability part of the policy becomes void as soon as a business is started on the premises. You may need to take out a business public liability policy rather than a domestic one. Your car insurance may also be affected if the car is used for business purposes. Investigate what cover you need from an insurance broker.

Find an insurance broker in your area

Go to the National Insurance Brokers Association of Australia (NIBA) Needabroker website. Select your location and main area of business, and NIBA will find brokers and contact details who specialise in your area of business and are located in your area. There are also tips for selecting the right broker for you. See External Links to the right of the screen.

Use ATO help to make tax easier

The Australian Tax Office (ATO) website has a range of online guides and calculators to assist small businesses with their tax obligations. Home-based businesses should use the tax guide booklet, Carrying on a business at or from your home, and the deduction claim tool, Home office expenses calculator. See External Links to the right of the screen.